Gold, Silver & Other Commodities

The Behre Dolbear Group has recently published its annual comparative country risk assessment of twenty-five countries that host the global mining industry. [If you own, or are thinking of buying, stocks of companies in this sector print, then I suggest you give the Report your full attention and pass this commentary on to friends, acquaintances and colleagues interested in the Resource Sector, and to your Investment Advisor. Words: 437

When forecasting, many economists and commentators fail to focus on the dramatic change in inter-country dependence in our ever more globalized world...and fail to let the actual markets influence their views. Below I critique two articles, rationalizing what they see for the price of gold for the balance of 2012. Words: 730

If you hold, or are considering holding, physical gold or silver or both, [it is imperative that you] read as many 'balanced opinions' as you possibly can with respect to ownership of each. [Here's why]. Words: 337

We’re invested in gold stocks not just to make money, but for the chance to change our lifestyles and with their lackadaisical [dare I say dismal] year-to-date performance, one may begin to wonder if they’re still going to bring the magic. [Here are my views on the subject.] Words: 740

We are making a very important bottom here [in gold]. This is rock bottom sentiment and a buying opportunity... Gold has made a higher low in my opinion. It has not revisited the levels of last December and I think its setting up for a big move here. What is it that is still ahead of us that could take gold to new highs? [Let me explain.]

“There’s no cliff here. There’s no need to panic whatsoever...[In] the two previous bull markets in gold, 1980 and 1934, gold ended at essentially a 1/1 ratio with the Dow Jones and the Dow today is over 13,000. Would I be surprised to see gold past $10,000? No. I know it sounds crazy but it sounds a heck of a lot less crazy than it did five or six years ago.”

Given the extremely high correlation between central bank balance sheets and the price of gold, it is possible to determine the implied price relative to current debt levels. In doing so, we calculate gold's "central bank balance sheet value" at around $1900 an ounce. [Let us explain further.] Words:

We are all focused on the short-term and that’s natural, but let’s step back and look at the longer-term picture...We know the debt levels are too high today...but, because less than 1% of world financial assets are in gold, we have yet to really see the gold market react to the massive global money printing binge of the last 10 years. Once the gold market starts reacting to all of this, that’s when gold is going to go exponential. It doesn’t matter whether investors are buying gold at $1,600 or $1,800, it’s irrelevant in the long-run. What’s important is they are invested in physical gold in order to preserve their wealth. [Let me explain why.]

In my opinion, there are three scenarios that could occur in the coming years when analyzing the global economy - and all three have the potential to offer bullish environments for the price of gold. [Let me explain the first and most likely reason.] Words: 660

Thanks to this similarity in events, as well as the similarity in sequence, of the price movement of silver from the beginning of 1966 to the beginning of 1980 with the end of 1999 to the end 2013, my analysis suggests that silver will comfortably pass $150 by that date. Let me explain my rationale. Words: 338